WASHINGTON Dec 6 The top U.S. tax collector
warned on Thursday of a delayed start to 2013's tax season if
Congress fails to reset the alternative minimum tax (AMT) on
high-income taxpayers so that it does not sweep in millions of
Without another adjustment by lawmakers soon to the AMT,
"many of us will see a delayed filing season," said Steven
Miller, named just last month as Internal Revenue Service acting
Miller did not give an exact date by which Congress must
approve an AMT "patch" to prevent a delay to the tax season,
which is scheduled to begin on Jan. 22.
"We don't have any drop-dead time in mind," Miller told
reporters after a speech at a conference in Washington.
But his remarks came on a day of continued stalemate in
Washington between Democrats and Republicans over what to do
about the "fiscal cliff" approaching at the end of the year.
The AMT is a crucial part of the assorted tax increases and
automatic spending cuts that make up the so-called "cliff," a
convergence of events that, absent congressional action,
threatens to plunge the U.S. economy back into recession.
"Many people don't realize that they could potentially face
a significantly delayed filing season and a much bigger tax bill
for 2012," if the AMT is not dealt with, Miller said.
"In programming our systems, the IRS has assumed that
Congress will patch the AMT as Congress has for so many years.
"And I remain optimistic that the fiscal cliff debate will
be resolved by the end of the year. If that turns out not to be
the case, then what is clear is that many of us will see a
delayed filing season," Miller said.
The AMT is a tax intended to make sure that at least some
tax is paid by high-income people who otherwise could sharply
reduce or eliminate their regular income tax bills through using
tax loopholes. About 4 million people annually pay the AMT.
Unlike the regular income tax, the AMT is not indexed for
inflation. So the thresholds that determine who must pay the tax
have to be regularly raised. This prevents the AMT from hitting
middle-class people whose incomes may have crept upward on the
back of inflation, but who are not wealthy.
Congress last patched the AMT in late 2010. Without another
patch, the AMT could hit as many as 33 million people for the
2012 tax year, according to the IRS.
Democratic Senator Charles Schumer of New York said on
Thursday he is "hopeful" that the AMT problem will be fixed with
a broader "fiscal cliff" resolution before Dec. 31.
Republicans in Congress may see the AMT as leverage in their
"fiscal cliff" negotiations with President Barack Obama and the
The IRS might have until mid-January to implement an AMT
patch and still start the tax season on time, if Congress
approves the fix as expected, said Richard Harvey, a tax
professor at Villanova University and a former IRS official.
The AMT "is a ticking time bomb that is going to go off some
time in January," Harvey said.